VIAB (Viacom Class B shares) formerly CBS Message Board

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Technology Stocks : VIAB (Viacom Class B shares) formerly CBS

VIA 50.85

0.0%

Nov 7 9:30 AM EST

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To: Larry S. who wrote (2558)	9/18/1998 9:47:00 PM
From: MGV	Read Replies (2) of 4613

Larry, A Warburg Dillon analyst assigned a value of $25 Billion to CBS' radio assets in a Business Week article last month. The projection is based on either comparative cash flow or revenue multiples. Compare CBS to 3 other radio/outdoor advertising competitors. Until AMFM's recent transaction of more radio assets, CBS had the undisputed largest radio business. The numbers provided below for CBS are for the entire company. I haven't calculated the relevant numbers for just the radio assets but they are much lower multiples (i.e. network and to lesser extent affiliate business distorts to the downside the value multiples), meaning CBS is even more undervalued than the comparisons below suggest. I think the market cap of CBS should be closer to $35 Billion on cash flow basis and that the radio assets are worth what CBS is worth today ($20-21 Billion. If I'm right (less than Warburg Dillon estimates) 20% of that would be $8-8 1/2 Billion. Pay down 2.5B in debt and use the rest for buy backs and acquistions. Symbol Company Name Price/Sales Ratio Price/Cash Flow Ratio CCU Clear Channel 11.01 39.7 AMFM Chancellor 4.65 26.3 JCOR Jacor 3.9 23.8 CBS CBS 3.31 16.7 In sum, Karmazin and Jordan believe the market is not assigning appropriate value to CBS today. They figured that the industrial assets were hiding value and they were right but there are still significant hidden asset values in CBS. That is why I own it.

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